Duke  University  Libraries 
"III  " 


D032 12489 


Ft  (J    Aih 


CONFEDERATE  STATES  OF  AMERICA,  j 
Tteasury  Department,  > 

Richmond,  November  20th,  1S61.       ) 

Hon.  Howell  Cobb, 

President  of  Congress  : 

Sir  :  I  have  the  honor  to  submit  the  following  report  of 
the  condition  of  this  Department : 

The  receipts  at  the  Treasury  from  all  the  various  sources 
of  income  up  to  the  16th  of  November  are  as  follows : 

From  Customs,             ....  949,612  84 

Miscellaneous  sources,           ...  792.777  90 

Export  duty  on  cotton.         -         -         -  1.311   65 

Loan   of  February    28th,    1861,             -  14,989.726  65 

Loan    of  May  and  August,            -         -  3,053,300  00 

Treasury    notes    under  Act    of  March  9,  2,021,100  00 

"         "         "      May  16,  17.347.955  00 

"     August  19,  12,830,400  00 

Interest  and  premium,          ...  33,963  67 

52,020,147  71 
Temporary  loan  from  Banks,         -         -  9,850,576  68 

$61 ,870,724  39 

The  expenditures  and  outstanding  warrants  are  as  fol- 
lows : 

For  civil,  &c,  -  -  1,745,670  18 
"  war,  -  -  -  66,018.740  03 
"    navy,      -         -         -     2,902,305  55    §70,666,715  76 


Balance  not  yet  paid,       -         -         -  $8,795,991,37 


This  balance  exists  in  the  form  of  Treasury  warrants 
which  are  in  transitu,  and  will  be  paid  by  issues  of  Treasury 
notes,  whenever  they  are  presented. 


This  large  amount  of  warrants  in  transitu  arises  from  the 
fact  that  the  payments  arc  all  made  by  Treasury  notes  is- 
sued at  one  point,  and  their  transmission  to  distant  places 
consumes  much  time.  This  difficulty  will  be  diminished 
whenever  the  number  printed  shall  be  sufficient  to  exceed 
the  daily  requisitions.  They  can  then  be  forwarded  on  de- 
posit to  the  various  Assistant  Treasurers  and  Deposita- 
ries. 

The  amount  set  forth  in  the  receipts,  as  borrowed  from 
Banks,  embraces  two  items.  The  first  consists  of  the  balance 
due  the  banks,  on  the  loan  of  their  notes,  made  in  advance  of 
the  issue  of  Treasury  notes,  and  reported  at  the  last  session 
of  Congress.  The  second  item  Avas  taken  up  under  the  fol- 
lowing circumstances:  Long  before  the  passage  of  the  Act 
of  last  session,  directing  the  issue  of  an  additional  number 
of  Treasury  notes,  this  Department  attempted  at  each  of  the 
principal  cities  in  the  Confederate  States  to  make  arrange- 
ments for  preparing  them.  A  contract  was  made  in  New 
Orleans  in  May  last,  and  inducements  were  offered  to  others 
to  import  facilities.  An  active  agent  was  also  sent  by  the 
Department  to  bring  on  workmen  and  machinery.  But, 
with  every  exertion,  it  was  found  impossible  to  meet  the  re- 
quisitions upon  the  Treasury.  These  requisitions  so  far 
exceeded  the  supply,  that  on  the  24th  October,  the  supply 
of  notes  fell  behind  the  requisitions  by  the  sum  of  $11,- 
892, S  15.98.  The  daily  requisitions  upon  the  Treasury 
continued  to  exceed  the  supply  by  nearly  50  per  cent.,  and 
the  difficulty,  therefore,  became  greater  every  day.  The 
only  relief  expected  was  from  a  further  supply  of  printers 
and  presses,  which  could  not  be  had,  for  at  least  four  or  five 
weeks.  The  arrearages  covered  the  pay  of  troops  and  their 
subsistence,  and  threatened  serious  injury  to  the  credit  of 
the  Treasury  and  to  the  public  interest.  Under  these  cir- 
cumstances, it  was  deemed  best  to  accept  the  tender  of  Ten 
Millions  of  their  notes,  which  the  banks  of  South  Carolina 
and  Georgia  had  made  at  an  interest  of  five  per  cent.,  on  a 
previous  occasion,  when  delays  in  preparing  engraved  notes 
were  expected.  The  arrangement  made  with  the  banks,  was 
a  return  of  the  amount  as  soon  as  Treasury  notes  could 
be  prepared  ;  so  that  the  interest  to  be  paid  by  the  Treasury, 
will  be  relieved  at  the  earliest  practicable  time,  and  is  amply 
compensated  by  the  relief  of  pressure  to  that  extent  upon 
the  Treasury.  This  relief  may  be  measured  by  the  fact, 
that,  notwithstanding  all  the  efforts  since  made  to  increase 


3 

the  supply  of  Treasury  notes,  there  is  now  a  large  arrear  of 
requisitions  lying  over — amounting  to  about  five-and-a-half 
millions  of  dollars. 

The  loan  taken  from  the  banks  appeared  to  me  to  be  in 
substance,  though  not  in  form,  the  same  as  that  authorized 
by  law,  and  at  a  less  rate  of  interest.  The  law  authorizes 
any  holder  of  Treasury  notes,  to  fund  those  notes  in 
Bonds  at  8  per  cent.,  payable  in  two  years,  and  these 
Bonds  are  re-exchangeable  at  the  will  of  the  holder 
for  Treasury  notes.  The  Bank  notes  borrowed  were  used 
in  payment  of  public  dues  as  a  substitute  for  Treasury  notes, 
and  if  an  exchange  had  taken  place  instead  of  a  substitution, 
the  Treasury  notes  could  immediately  have  been  funded  in 
bonds  or  stock  at  8  per  cent.  The  transaction  which  ac- 
tually took  place  effects  the  same  result,  excepting  that  it  is 
at  a  less  rate  of  interest;  and  I  respectfully  ask  its  sanc- 
tion by  Congress.  I  have  the  satisfaction  to  add  that  our 
efforts  to  procure  at  home  the  notes  and  paper  have  raised 
up  three  home  manufactories  of  bank  note  paper,  and  an  es- 
tablishment for  engraving  bank  notes. 

The  preliminary  arrangements  for  the  collection  of  the 
war  tax  have  been  made,  according  to  the  directions  of  the 
law.  Chief  Collectors  have  been  appointed  in  all  of  the 
States,  and  the  States  divided  into  Districts.  It  has  been 
found  that  the  limited  compensation  allowed  to  the  District 
Collectors  has  compelled  the  districts  to  be  made  smaller 
than  is  desirable.  It  would  have  been  better  to  increase  the 
allowance,  particularly  in  cities,  and  give  the  collector  a 
larger  jurisdiction.  It  is  a  subject  of  doubt  whether  the 
salary  of  the  Chief  Collector  was  intended  to  include  office 
hire  and  all  contingencies.  I  have  interpreted  the  law  as 
including  within  the  salary  every  expense  except  books,  sta- 
tionery, advertising,  postage,  and  the  like. 

On  examining  the  clause  relating  to  the  tax  on  money,  it 
will  be  found  that  a  doubt  is  created  as  to  the  extent  of  the 
exception.  Congress  intended,  unquestionably,  to  tax  cash  on 
hand  and  on  deposit,  and  I  think  that  intention  is  expressed  by 
the  act.  But  the  failure  to  insert  a  semicolon,  and  the  use 
of  the  conjunction  "  and,"  has  given  occasion  to  interested 
parties  to  raise  a  question,  and  to  claim  that  the  conjunc- 
tion places  the  cash  among  the  excepted,  instead  of  the  taxed 
property.  It  would  be  well  to  settle  the  question  by  a 
clause  in  any  supplementary  act  which  may  be  passed. 

The  great  extent  of  our  country,  together  with  the  con- 


dition  of  tho  times  has  rendered  it  impossible  to  comply 
with  the  requisitions  of  the  act  fixing  a  time  for  making  as- 
sessments. This  time  was  fixed  at  as  early  a  day  ;is  tho 
first  Monday  in  November,  chiefly  with  the  view  to  enable 
the  State  Legislatures  to  determine  whether  they  would  as- 
sume the  payment  of  the  tax.  But  it  has  been  found  im- 
practicable to  accomplish  this  end  within  the  time.  I  re- 
commend, therefore,  that  the  time  for  making  the  assessment! 
■:tendcd  to  the  first  day  of  January  next.  This  will  in- 
volve an  extension  of  time  for  the  subsequent  proceeding, 
but  it  will  not  affect  the  date  at  which  the  collection  of  tho 
tax  is  directed  to  be  made 

The  Treasury  notes  issued  under  the  act  of  May  16th, 
1861,  amount  to  nearly  twenty  millions,  and  the  authority 
given  by  that  act  is  exhausted.  One  of  the  provisions  of  this 
act  was  an  experiment,  which  has  been  found  to  work  well.  It 
allowed  these  twenty  millions  of  notes  to  be  funded  in  ten 
year  bonds  or  stocks,  which  should  be  re-exchangeable  for 
Treasury  notes.  A  large  amount  of  these  notes  have  been 
thus  funded,  and  the  bonds  and  stock  are  quite  in  demand. 
Almost  the  entire  loan  first  taken  from  the  banks  has  been 
funded  by  them  in  this  stock,  and  it  seems  to  me  advisable 
to  extend  the  privilege  to  all  the  Treasury  notes  allowed  by 
law.  The  act  of  May  1 6  gives  the  privilege  to  the  two  year 
Treasury  notes  issued  under  that  act,  and,  until  the  experi- 
ment was  tried,  it  was  not  deemed  advisable  to  include  the 
issue  under  the  act  of  August  19.  It  has  since  been  found 
that  the  Treasury  notes  have  derived  additional  currency 
from  the  freedom  with  which  they  can  be  converted  into 
an  interest  bearing  security,  which,  at  any  moment,  can 
be  reconverted  into  currency.  The  advantage  to  these  se- 
curities is  so  great  that  I  think  they  could  be  made  to  bear 
a  less  rate  of  interest.  I  recommend,  therefore,  that  the 
holders  of  any  issue  of  Treasury  notes  be  authorized,  under 
such  regulations  as  may  be  issued  by  the  Secretary  of  the 
Treasury,  to  fund  them  in  bonds  or  stock  bearing  a  rate  of 
interest  not  exceeding  7  per  cent.,  which  bonds  or  stock 
shall  be  re- exchangeable  for  Treasury  notes.  It  seems  to 
me  probable,  that  6  per  cent,  interest  will  be  sufficient  for 
these  securities,  and  I  propose  to  try  that  rate  ;  but,  as  it 
may  not  prove  so,  it  would  be  well  to  give  the  power  to 
issue  at  7  per  cent.  I  Avould  prefer  attempting  the  lower 
rate  for  another  reason.  It  is  desirable  to  hold  out  induce- 
ments  for   investment  in  the  permanent  funded  debt.     A 


difference  of  two  per  cent,  interest  would  furnish  that  in- 
ducement; but  so  long  as  the  convertible  bonds  bear  an  in- 
terest nearly  the  same  as  the  permanent,  the  former  will  be 
preferred,  and  will  bring  a  higher  market  price.  Still,  as 
there  is  some  uncertainty  what  difference  is  requisite  to  effect 
this  result,  I  respectfully  recommend,  that  a  discretion  be 
confided  to  the  Secretary  of  the  Treasury  on  this  point. 

The  whole  fifteen  million  loan  of  February  28,  1861,  has 
been  taken  up.  Upon  the  loan  of  August  19th,  a  large 
amount  has  been  subscribed  from  the  proceeds  of  the  sale  of 
produce.  As  the  value  of  the  produce  is  uncertain,  no  ab- 
solute estimate  can  be  made  of  the  avails  of  the  proceeds. 
Reasonable  conjecture  rates  the  amount  at  between  forty 
and  fifty  millions. 

The  Treasury  notes  already  issued  amount 

in  the  whole  to,  -         -         -         -$32,199,455  00 

The  bonds  exclusive  of  the  loan  of  Feb.  28,      3,053,300  00 

The  amount  of  temporary  loan  from  banks, 

for  which  Treasury  notes  must  be  issued,       9,850,576  68 

And  the  balance  of  Treasury  warrants  out- 
standing, for  which  Treasury  notes  must 
also  be  issued,  is,  -  8,795,991   37 


Total,          -                  -         -     53,899,323  05 
Which  being  deducted  from  amount  authori- 
zed, say, 100,000,000  00 


Leaves  authority  to  issue  only,         -         -  $46,100,676  95 

This  sum  being  not  more  than  the  amount  probably  requir- 
ed for  the  bonds  for  the  Produce  Loan,  it  is  clear  that  authori- 
ty must  be  given  for  extending  the  issue'  of  Treasury 
notes.  The  amount  of  this  increase  must  be  determined  by 
the  period  which  Congress  shall  see  fit  to  provide  for.  This 
period,  it  seems  to  me,  must  extend  at  least  to  April  next, 
because  the  new  Congress  could  scarcely  make  new  arrange- 
ments before  that  date.  The  expenditures  for  the  last  two 
months  have  averaged  about  20  millions  per  month.  At 
that  rate,  from  1st  November  to  1st  April  will  require  one 
hundred  millions  for  current  expenses.  It  is  not  probable 
that  any  considerable  amount  will  be  realized  within  that 
period  from  the  Produce  Loan ;  and,  therefore,  the  whole 
sum  must  be  raised  by  Treasury  notes. 


It  ii  thai  the  existing  laws  only  au- 

thorize a  further  issue  of  both  bonds  and  Treasury  notes  to 
about  forjty-six  millions,  and  that  the  Produce  Loan  will 
probably  exhaust  this  amount. 

Authority  is,  therefore,  required  to  issue  bonds  for  fur- 
ther loans,  to  be  subscribed  by  the  citizens,  or  to  be  used  in 
the  purchase  of  army  supplies,  and  the  amount  of  these 
bonds  added  to  the  one  hundred  millions  additional  for 
Treasury  notes,  will  furnish  theextenl  of  additional  authori- 
ty required  of  Congress.  When  these  Treasury  notes  shall 
have  been  used,  the  whole  issue  of  Treasury  notes  :vill  amount 
to  about  one  hundred  and  fifty-four  millions.  It  is  hoped  that 
a  considerable  portion  of  these  notes  will  be  funded,  and  in 
that  way  reduce  the  amount  of  circulation,  and  to  that  end, 
it  is  advisable  to  make  the  funded  debt  as  secure  and  as 
acceptable  to  the  public  as  may  be  practicable. 

I  propose  to  issue  the  bonds  and  stock  authorized  by  the 
act  of  August  19,  upon  the  plan  suggested  by  Mr.  Holmes, 
of  South  Carolina,  and  adopted  by  the  city  of  Charleston. 
The  principle  of  the  plan  is  the  semi-annual  payment  of  a 
part  of  the  principal,  and  the  appropriation  of  a  fixed 
amount  sufficient  to  pay  the  whole  interest,  together  with 
the  portion  of  principal  proposed  to  be  paid  off.  Every 
year  the  amount  required  for  interest  becomes  less,  and 
adds  to  the  amount  applicable  to  the  principal. 

It  will  be  seen  that,  by  this  method,  the  entire  debt  can 
be  extinguished  in  twenty  years,  by  raising  annually  the 
interest  and  one-twentieth  of  the  principal.  I  have  as- 
sumed that  after  the  expiration  of  two  years  from  the  first 
January  ensuing,  payments  of  principal  may  be  com- 
menced ;  and  as  the  law  limits  the  bonds  to  twenty  years, 
I  propose  to  issue  them  in  semi-annual  periods,  extending 
over  eighteen  years,  from  first  January,  1864,  and  paying 
semi-annually  one-thirty-sixth  of  the  principal. 

It  seems  to  me  that  the  varying  periods  at  which  the 
bonds  become  payable  will  recommend  them  to  the  public, 
and  especially  to  the  subscribers  to  the  Produce  Loan.  In 
time  of  peace  the  distant  bonds  would  be  preferred ;  but  I 
think  that  at  this  time  the  short  bonds  will  be  in  great- 
est demand.  Every  subscriber  to  the  produce  loan  who  has 
debts  to  pay  will  prefer  the  short  bonds,  as  they  may  be 
made  available  for  that  purpose.  So,  too,  persons  funding 
Treasury  notes  will  probably  prefer  short  bonds.  More- 
over, the  different  dates   will  suit  guardians,  trustees,  and 


other  persons,  who  make  investments  with  a  fixed  purpose, 
and  it  is  believed,  therefore,  that  this  plan  will  suit  the 
wants  of  all,  better  than  any  other  ;  while  the  advantage  to 
the  Government,  in  having  its  debt  gradually  and  steadily 
diminished,  is  a  full  compensation  for  the  additional  expense 
and  inconvenience  of  such  an  issue. 

As  soon  as  the  estimates  of  additional  appropriations  re- 
quired by  the  various  departments  shall  be  received,  I  shall 
submit  the  further  financial  estimates  and  recommendations 
which  they  shall  call  for. 

I  have  further  to  report  that  under  the  provisions  of  the 
act  of  Congress,  an  Assay  Office  has  been  established  at 
Dahlonega  ;  and  that  no  application  has  yet  been  made  for 
the  office  at  Charlotte. 

I  have,  also,  to  report  that  under  the  provisions  of  the 
act  of  February  28th,  1861,  I  have  extended  the  ports  of 
delivery  at  Memphis  and  Nashville  into  ports  of  entry  ; 
and  for  the  convenience  of  disbursing  officers  in  Tennessee, 
Kentucky,  Arkansas,  Mississippi  and  Missouri,  I  have,  un- 
der the  provisions  of  the  act  of  Congress  of  6th  August, 
1846,  made  the  Collectors  of  these  ports  depositories  of 
public  moneys. 

All  which  is  respectfully  submitted. 

C.  G.  MEMMINGER, 

Secretary  of  Treasury. 


Statement  exhibiting  the  Receipts  and  Expenditures  of  the  Gov* 
ernment,  from  its  Organization  to,  and  including,  Nov.  \6th, 
1861: 

Receipts  to  June  30,  186]  >vc: 

From  Customs,        -                         -  $797,960  43 

Miscellaneous  sources,          -  0:29,165  51 
Subscriptions  to  Loan  of  Feb'y 

28,  1861,    -            -            -  7,450,749  65 

Interest  on  ditto.,     -             -  1,044  57 

Premium  on  ditto.,                -  4,187  62 

Treasury   Notes   issued   under 

act  of  March  9th,  1861,     -  1,116,400  00 

$9,999,507  78 


Receipts  from  July  1st  to  Nov'r  16th,  1861,  in- 
clusive, as  per  statement  furnished  by  the 
Treasurer: 

From  Customs,            -            -            -  151,652  41 

Export  duty  on  Cotton,            -  1,311  65 

Miscellaneous  sources,              -  163,612  39 
Subscription  to  Loan  of  Feb'y 

28,  1861,         -            -           -  7,53S,977  00 
Subscription   to   Loan  of  May 

16,  1861,        -            -           -  2,702,100  00 
Subscription  to  Loan  of  Aug't 

19,  1861,        -            -            -  351,200  00 

Temporary  Loan  from  Banks,  9,850,576  68 

Interest  on  Loans,        -            -  27,563  14 

Premium  on  Loans,      -            -  1,168  34 
Treasury   Notes   issued   under 

act  of  May  16,  1861,             -  17,347,955  00 
Treasury   Notes   issued    under 

act  of  August  19,  1861,        -  12,830,400  00 
Treasury  Notes   issued   under 

act  of  March  9, 1861,           -  904,700  00 


51,871,216  61 


Total  receipts,      -  .  -  $61,870,724  39 


Statement — Continued . 


Expenditures  to  Sept'r  30,  1861,  inclusive : 
Civil,   Miscellaneous,   Foreign   Inter- 
course and  Public  Debt,   -  -    $  1,506,548  72 
War,               ....      39,507,440  10 
Navy.              -  1,962,928  79 


Expenditures    from    October    1st   to   November 
16th,  1861,  inclusive,  as  per  statement  fur- 
nished  from   office  of  the   Secretary  of  the 
Treasury : 
Civil,    Miscellaneous,  Foreign   Inter- 
course and  Public  Debt,  -  239,121  46 
War,             ....        26,511,299  93 
Navy,            -                      v  -            -  939,376  76 


42,976,917  61 


Total  expenditures. 


27,689,798  15 
$70,666,715  76 


CONFEDERATE  STATES  OF  AMERICA, 

TREASURY  DEPARTMENT, 
Register's  Office,  Nov'r  19,  1861. 


ROBERT  TYLER, 

Register. 


Hollinger  Corp. 
pH8.5 


